Hong Kong: Defendants Aren't Always Required To Disclose Documents Referred To In Their Pleadings – Moulin V. Olivia Lee

Last Updated: 31 July 2013
Article by Tow Lu Lim and Jenny Yu

In Moulin Global Eyecare Holdings Limited (In Liquidation) v. Olivia Lee Sin Mei, the Court of Appeal dismissed the plaintiff's appeal for an order that the defendant disclose her insurance policy despite the fact it was referred to in her affidavit.

Background

Prior to Olivia Lee Sin Mei's (Ms. Lee) appointment as a director of Moulin Global Eyecare Holdings Limited (Moulin) between 2000 and 2004, she was a legal advisor to Moulin and continued to hold this post during her directorship at Moulin. Liquidators were appointed shortly after issues with the financial statements of Moulin group of companies arose. In 2008, Moulin commenced legal proceedings against Ms. Lee alleging that she was in breach of her duties as a director of Moulin. Proceedings were also brought against other parties for damages overlapping those claimed from Ms. Lee. Settlement agreements were entered into between Moulin and those other parties and such agreements were disclosed to Ms. Lee pursuant to a court order. That order limited the parties to whom the settlement agreements might be disclosed to members of a "confidentiality club" which included her solicitors and counsel. Ms. Lee then made an application to expand the confidentiality club to include her insurers, XL Insurance Company Limited, and in that application she made reference to and set out extracts from her insurance policy.

In the Court of First Instance, Moulin was unsuccessful in its application for an order under Order 24, rules 10 and 11 to have Ms. Lee make the insurance policy available for inspection and provide copies of it (O. 24 r. 10 permits a party to seek production of any document referred to in the other party's pleadings, affidavits or witness statements). The judge held that the content of the insurance policy was not relevant to the underlying dispute but only to her application to include XL Insurance in the confidentiality club, and that production of the policy would be prejudicial to Ms. Lee in that it would give Moulin a tactical advantage by providing it with knowledge of the details of her insurance arrangement, including the limit of cover.

On appeal to the Court of Appeal, it was argued that the judge in Court of First Instance erred in applying the legal test and that it was contrary to the underlying rationale of O.24, r.10. (that the rule was established with the intention to give the opposite party the same advantage as if the document had been fully set out in the interests of fairness and equality of information).

Test for an Order for Production for Inspection

In dismissing the appeal, the Court of Appeal held that the legal test was correctly applied. Any order for production for inspection under O.24, r.10 is subject to rule 13(1). Primarily, two stages are considered. First, the onus is on the party resisting disclosure to show good cause why an order for production should not be made. Second, and independent of the first stage, the applicant seeking an order for production bears the burden to show that the order is necessary either for disposing fairly of the cause or matter, or for saving costs. The court reiterated that O.24, r.13 allows for broad discretion, which reflects the underlying rationale stated above. However, exceptions to the general rule are allowed, such as irrelevance and privilege.

The Court of Appeal did not agree with Moulin's contentions that the judge's exercise of discretion was flawed in taking into account irrelevant considerations such as that Moulin would gain a tactical advantage to the prejudice of Ms. Lee if the policy were disclosed and that the policy was irrelevant to the issues between the parties in the main action. Agreeing with the First Instance Court, the Court of Appeal was of the view that disclosure of the policy would provide Moulin with a windfall and manifest advantage. The court also held that the judge was entitled to take into account the issue of relevance of the policy to the main action.

Conclusion

This case is quite unusual in that for most cases the fact that a party has referred to a document in his pleading will be a strong indicator of the relevance of the document and also of the necessity for its production. It is curious to note that it was not really necessary for Ms. Lee to refer to the insurance policy in her affidavit.

Nevertheless, as this case has shown, it does not always follow that a party served notice pursuant to O. 24 r. 10 is required to make documents available that are referred to in one's pleadings. It should be remembered that the court has broad discretion and looks into balancing the advantages and disadvantages of ordering the documents concerned to be disclosed. The issue of relevance of the insurance policy to the underlying dispute was a material consideration for the court in this case. But the court was also concerned about not conferring a tactical advantage if the plaintiff had the benefit of details of Ms. Lee's insurance coverage. In this respect, the decision raises an interesting debate as to whether or not insurance policies should be discovered in litigation. On the one hand, a case could be made that the plaintiff should be entitled to know about the extent of the defendant's insurance coverage (especially in the context of a claim by a liquidator). On the other, however, a respectable argument can be made that the defendant's insurance position is irrelevant and disclosure of the insurance policy will inevitably impact on its negotiation power. In that respect, insurers can breathe a sigh of relief.

Visit us at www.mayerbrownjsm.com

Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions